Eurozone Q2 GDP Forecasts: Last Update

Since our last update, several German and French officials confirmed that the two largest economies grew in Q2 and even gave some indications regarding second-quarter figures:

1/ The German economy probably expanded about 0.75 percent in the second quarter, according to a government estimate.

2/ After saying that recession is over, France’s finance minister denied that France has revised down its economic prospects for 2013 suggesting that the Q2 figures could be encouraging.

As a consequence, we can update our scenarios with a more optimistic approach regarding French and German contributions. By taking into account the weight of each economy in the euro area (Germany: 27%; France: 21%; Italy: 18%; Spain: 12% and Belgium: 5%), we can adjust our forecasts:

Growth Forecasts

Scenario

Pessimistic

Central

Optimistic

Germany

0.75%

0.75%

0.75%

France

0.1%

0.2%

0.3%

Italy (1st publication)

-0.2%

-0.2%

-0.2%

Spain (1st publication)

-0.1%

-0.1%

-0.1%

Belgium (1st publication)

0.1%

0.1%

0.1%

Others

-0.2%

-0.1%

0.0%

Growth Contributions

Scenario

Pessimistic

Central

Optimistic

Germany

0.202%

0.202%

0.202%

France

0.021%

0.042%

0.063%

Italy (1st publication)

-0.036%

-0.036%

-0.036%

Spain (1st publication)

-0.012%

-0.012%

-0.012%

Belgium (1st publication)

0.005%

0.005%

0.005%

Others

-0.034%

-0.017%

0.000%

Total

0.146%

0.0184%

0.0222%

Total (rounded)

0.1%

0.2%

0.2%

Last data change the final results (rounded) of each scenario. The central estimate becomes 0.2%. Therefore, thanks to Germany and France, the Eurozone economy should technically recover (two positive quarters) in Q3 as several surveys (Eurozone PMI, Sentix Investor Confidence)show that conditions have improved since the end of June.